Economic Update: Dark Times, Hard Truths

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On this week's show, Prof. Wolff presents updates on mismanaging Covid-19 and US system's crash; reactions to economic decline; sharing gains of firms profiting from the virus; the mistake of "dominating;" mass joblessness equals class war.The second half of the show features an interview with comedian and podcast host Jimmy Dore on today's crises and roles of GOP and Democrats.


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This transcript has been edited for clarity
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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives: jobs, incomes, debts, our own, those of our children coming down the road. And I’m your host, Richard Wolff.

I want to begin today by talking about not the failures of capitalism in terms of preparing for the virus or preparing for the economic crash of our system. No, we’ve talked about that. I want to talk today about how capitalism also fails at managing these twin overlapping crises.

So let’s start with the virus. The overwhelming failure there is the failure to test the population to see who has it, who has it with symptoms, who has it without symptoms, and who doesn’t have it. We haven’t tested the overwhelming majority of American people. So we don’t know as a society who has it and who doesn’t, who, therefore, needs treatment, who doesn’t. If you want to reopen America and bring people back to work and shop, it would be important to know and to be able to identify who is carrying the disease and who isn’t to make sure those, who are carrying it, get the best possible treatment in the safest possible way and to relieve everybody else from worrying that, when they go to work and when they go to shop, they will be interacting with people who could infect them. It’s a disaster that this system hasn’t done that. That’s not managing the virus. It’s failing to do that and only underscores the problem when the President or any employer is seen on television urging or, in some cases, threatening people to go to work, and yet, being silent on any demand, any mandate that the employer has to provide a safe and healthy workplace, which would require, you got it, testing—testing by the employer or testing by the government. Somebody in this system has failed to organize the testing. But the failure goes beyond that. A story recently in the Los Angeles Times speaks about quote, the “Wild West” of virus testing companies. If you read the story, you will learn that there are many, many companies in various ways trying to jump on the testing bandwagon. Uh-oh, capitalism to the rescue? No. To the mess. Because here’s what that means—profit is the driver. All these companies want to profit from the desperate Americans who will want to be tested, because the system has failed to test them to this point, the employers who wanted. There are stories in there of employers buying $300, $400-dollar testing equipment—wildly overpriced—not knowing whether it’ll work or not, whether the tests are reliable or not. Instead of a coordinated national focus on solving this problem by giving the priority to testing—we all know it ought to have—instead we have the capitalist’s way—we don’t test. And meanwhile, we allow profit driven companies to do who knows what in the way of testing. And when some tests turn out to be false, unreliable, then we’re going to have people who don’t get tested, because they don’t believe there’s a point in it. The problem worsens itself. This is a failure to manage a social problem. And it is a capitalist failure—that’s what has to be understood.

Let me turn next to the economic crash. And here’s the failure is of sort of a different one. I’m going to give you just a couple of examples. Here’s the first one. The Federal Reserve has decided to purchase corporate debt. Let me explain what that means. If you are a company and you borrow money in the market, you give the lender, who gives you money, a certificate. It’s called a corporate bond—it’s your promise as a corporation to repay that loan at a certain point with interest over the time between now and then. So here’s what happens. The corporations go into the market and borrow the money. They have no trouble finding the lender. You know why? Because the lender gives the corporation the money, gets from them the bond—and here we go now—immediately, I mean within seconds, sells that bond to the Federal Reserve for money. They started with money, they went through this little rigmarole, they gave it to the corporation, they got the bond, they sold the bond of the Federal Reserve, and now they have more money than they started with 25 seconds ago. They’ve made a nice little piece of change. They do it over and over again. Every company in the country can borrow virtually limitless amount of money. You may be suffering as an unemployed—one of the 40 million—your company may be small and going out of business, but if you’re big enough to issue bonds—there’s no limit. This is called making a situation worse by helping those who need at least at the top of the heap and everybody else’s expense. Inequality will get worse in the United States as a result of this. Corporations will load up on even more debt than they have now. This is a situation getting worse, not better. Here’s your second statistic. Half of all commercial rents, rents paid by stores, restaurants and so forth, in malls or on streets, weren’t paid in May. Almost as many weren’t paid in April. Landlords are, therefore, in a difficulty. They’re not getting any money from their tenants so they can’t pay back the banks from whom they borrowed the money to develop the mall or to develop the store that they’re leasing to the tenant. You get the picture? Everyone is now going into court fighting one another. Those who don’t want to pay are fighting to be allowed not to. Those who are landlords are fighting to force their money. It’s unclear who will win, but here’s the point. It’s a struggle. Everybody’s on their own. If you’re rich enough to have the bevy of lawyers, you’ll win this one and you’ll screw those who are less wealthy, who can less afford lawyers and all the rest. It’s what the French call “sauve qui peut”—everyone for themselves. And here’s the punchline. If the working class—white and black, male and female, very skilled, semiskilled—if that working class doesn’t get itself together and mobilize its resources and its people, it will come out on the short end of this game, because everybody else is lawyering up to fight out who gets screwed and who gets saved. The reason people joined labor movements in the 1930s—the greatest moment of labor union organizing in American history—is because they understood, while I hope you understand, you better organize in political parties, in labor movements—whatever, community organizations, because this is a struggle in which your numbers and the resources you can pull will determine how you come out at the end. Capitalism does not manage its own failures very well. And it’s very dangerous to get caught up in those failures without organization to give you the strength you cannot manage on your own.

My next update for today has to do with Sam Mendes. In case you don’t remember who Sam is, he’s a pretty well-known film director. He won an Oscar for his film “American Beauty”. And he did something this last week that brought him to my attention. He offered a public criticism of Netflix, Amazon Prime, and others whom he referred to as, in so many words, “profiteers from COVID-19”. These are companies that are making piles of money as everybody stuck at home, uses these services and has to pay for them. And he asked that they either be taxed or give up money to help home, the theater in London, the teachers of theater in London, because that’s where the talent comes from that they make their money off of. And those institutions, the theaters, are shut and they’re about to collapse. So he said a small amount of the extra profits made by these big companies could keep alive the theater out of which the talent comes without which there’d be no Netflix and Amazon Prime to pay for. Nothing has been heard from those companies about them. Here’s a general argument that comes out of the Sam Mendes story. If the rich do not help the poor, in the end, they won’t be rich very much longer. If those who are making money off of the virus cannot find a way to share some of that with those who are being destroyed by the virus, we’re going to have trouble coming up into our future. The example is Europe. In the last crash, the Germans went their own way: they didn’t help the Greeks and they didn’t help the Spanish, they didn’t help the Italians the way they could have. And the division in Europe is one of the reasons Europe has the worst problems these days with struggling competitively with China and the United States, with handling the virus, where it has been terrible. The disunity may be an advantage for the short run, but not for the longer one.

Another update. Trump urges the military this last week to “dominate”, that’s his word, “protesters”. I find this a remarkable idea to “dominate”. Dominate is not to solve the problems. People protest because there are problems that aren’t being solved. Dominating them doesn’t solve the problem. Well, will it make the protests go away? Again, in the short run, maybe. In the long run—never. We tried to dominate in Vietnam—we were defeated. We tried to dominate in Afghanistan—we are now negotiating with the Taliban. We tried to dominate in Iraq—they’re trying to throw us out of the country. You get the picture? Every time you kill or hurt a local person—yeah, you dominated them, all right—but 30 of their relatives now hate your guts. You made 30 more for everyone you took out. This is an old law. It worked to the American advantage in the war against Britain to become independent. But we seem to have forgotten the lesson and we got a president who has no idea about any of this. And so he’s out there to dominate. He’s got people working on domination. It doesn’t solve the problems that caused the protests in the first place

And now my last update for today. Mass unemployment that we have in this country now, tens of millions—let’s make no mistake, ups and downs of statistics changed nothing, tens of millions of unemployed—that’s called class war. And here’s why. The employers throw you out of work. Then the employers, which they’ve done that with about 40 million Americans, roughly one quarter of Americans have had to file and get involved with unemployment. Now that they know desperate people are becoming very much more desperate with each day: you’re running out of any savings that you’ve accumulated, you’re worried that your unemployment compensation will be cut or eliminated in July when this phase of it comes due, you’re wondering whether there’ll be any job for you when you’re done wanting to go back, whether the company, the employer will still be there. And the employers know you’re desperate. So the employers are now going to the 120 million of us still working and saying, “You’re going to have to take a wage cut. You’re going to have to lose some benefits. You’re going to have to come in early. Your lunch hour is shorter.” And they can get away with it. You know why? Because if you don’t accept it, there’s lots of unemployed people out there who will. So this is an assault on everybody. And that’s going to be played out in the next six months unless, again, we get the message—we have to organize to fight or else we’re coming out on the short end.

We’ve come to the end of the first part of today’s show. Please remember to subscribe to our YouTube channel. Follow us on Facebook, Twitter, and Instagram. And be sure to visit democracyatwork.info where you can learn more about our activities, our union store, the books we publish and so on. And finally, a special thanks to our Patreon community for their continuing support. Stay with us. We’ll be right back for a very important interview.

Welcome back, friends, to the second half of Economic Update. It is my great pleasure to welcome to our microphones and to our cameras Jimmy Dore. Jimmy is well known, I think, to many of you and I hope this program helps introduce him to many more of you. He’s a comedian and host of his own show and podcast called “The Jimmy Dore Show”. He is the star of several Comedy Central specials as well as the author of his best-selling book “Your Country Is Just Not That Into You”. He has also made several guest appearances on “The Joe Rogan Experience” podcast, RT America, Rolling Stone’s “Useful Idiots”, and The Hill.

WOLFF: So first of all, let me thank you, Jimmy, for joining us.

DORE: My pleasure. Thanks for having me. Big fan of your show.

WOLFF: Thank you. Alright, let’s start. I want to get your thinking about some things. I want to start off with what for this program, at least, is an overwhelming fact: 40 million—give or take, depending on how you count—40 million people have been fired, let off, laid off, whatever words you want, over the last few weeks. And that means with those people hurting and many, many of them being at the lower end of the income distribution that the inequality we knew was a problem before is actually getting worse and promises to continue. What do you make of a country like ours, about which what I just said, is the truth?

DORE: So what I think about that is that the country in quick decline, right? So it started, as far as I can tell, somewhere around 1980 when they started decimating unions. Reagan famously fired PATCO—would set the tone for what we’re living in now, right—the biggest income inequality since the Gilded Age, even before that. And no one seems to care. Barack Obama was President for eight years. He didn’t do a damn thing about it. In fact, he made the banks bigger made, the Bush tax cuts permanent, took us from two wars to seven, opened the Artic to drilling twice whenever shale oil asked, put fracking pipes underneath this country, and then he allowed cops to crack the heads of peaceful protesters at Occupy Wall Street from coast to coast. And now when they force everyone’s businesses to shut down, the government doesn’t even take care of them. So there’s way, there’s many, many ways to take care of this besides the way they did, which was let everybody get fired or laid off, and then they have to apply for unemployment insurance, and then there the Small Business Administration is going to through the banks give money to the small. It’s it was a cluster screw-up. And what they did in Germany is what we should’ve done here. If they just wire the money into the businesses’ bank accounts so they don’t have to lay anybody off, they keep paying their workers until the government says, “You can go back to work.” So then you just seamlessly go back into the workplace. Now it’s not like that was a secret that they didn’t know that that was a plan that they could do. They didn’t want to do it. They did not only that. They didn’t give us healthcare at the beginning of a pandemic. We’re in a pandemic and they don’t immediately give people health care. What kind of a government does that? Well, in the words of Dylan Ratigan “a rapacious oligarchy”. So now what we used to do to countries overseas, use our military to overthrow their government, install a puppet dictator so then we can steal their natural resources for our Western governments. Well, we didn’t do that here in the United States. We didn’t need a military to overthrow our government, because our governments already been captured by corporations. It’s the corporate capture of our government. And the Princeton study revealed years ago that we don’t even live in a democracy anymore. What we do live in is an oligarchy. Well, I would say a rapacious oligarchy. What you’re seeing now happening this social phenomena was predicted the day they passed the CARES Act. So when they make everybody shut down there and now they can’t have no income, no economic activity, and the government doesn’t come in and take care of them. Instead, what the government did with the blessing of Bernie Sanders (I-Vt.) was they committed that largest upward transfer of wealth in the history of humankind. And they had practiced doing this in 2008—it took a month to do it. So what that was is a big transfer of wealth upward again. And they did it this time, but they did it within days—a week it happened with the CARES Act. And what was the CARES Act? The CARES Act was they took five trillion dollars, they gave it to the richest thousand people in the country while everyone else had no money. So now while all the assets are depressed, there’s only a handful of people who have all this money and they’re going to go buy up all these distressed assets that are now devalued. And then when the rest of us start to get money again, all those prices are going to be reinflated. So this is going to, again, explode the income inequality. And so what’s happening right now is we are living in the effects of a rapacious oligarchy that literally is legislating against its own citizens. You know, people, the government right now, the propaganda is to get us angry at China. And if you know anything about the economics of China and the United States, China didn’t set up this system—we set this up. Capitalists in America set up a system we would outsource our manufacturing to slave labor. And then they would get a tax cut for it, because their government is captured by those same corporations. So that’s what we’re lived, so that’s what it makes me think. We don’t have to have 40 million unemployed. We don’t have to have people without health care. We are rich enough to take care of all of this. And I think the fact that people are catching on to that is why they’re in the streets right now.

WOLFF: Alright, Jimmy. Two connected questions flowing directly out of what you said. First question. Will Trump, the GOP, and the Democrats that are working with them in the government, will they be able to get away with all of this? Will the American people accept everything you just said or are these protests that we’ve seen in the last 10 days, are they the beginning of a genuine opposition? And before you answer, where in all of this would you locate the Democratic Party making the decision to have Joe Biden their candidate in the election?

DORE: I do not, I… so when this COVID-19 virus pandemic hit and we became aware of it and it was predicted by Dylan Ratigan on my show—and we all agreed that they were going to have to do Medicare for All and a UBI. And I asked Dylan at the time like, “Why would they do that? They hate that.” And he said, “Well, they’re out of options.” Well, it turns out there was another option. The other option was let people go without health care or money. And now you’re seeing the result of it. And their answer to this is Joe Biden. So amazing to me that Bernie Sanders ran for President in 2016 was cheated by the DNC and Hillary Clinton. Unbelievable corruption in the DNC primary. Bernie Sanders didn’t do a damn thing about it. And then for four years didn’t organize against the DNC. He organized for them. He was their political outreach. So what his job was to go get Progressives and bring him into the Democratic Party so then the party could squash them. Instead of what Bernie Sanders should have been doing was using these four years to build as a force outside the Democratic Party to actually pull them left or to be an alternative to them. So what Bernie Sanders was doing was actually making sure a third party didn’t organize and didn’t form foment. And so now the Democrats have Joe Biden. Joe Biden is the reason we have Trump. I don’t know, the reason why the prison population exploded—Joe Biden. The reason why we have a deregulation of the banking system, which created, guys, 8 million people getting kicked out of their house in the last recession that was Joe Biden. If you want to know why people don’t have health care, it’s because Joe Biden and Barack Obama did a health care plan that was invented in the Heritage Foundation and is a giveaway to Big Pharma and a giveaway to the health insurance companies. So why do, all of a sudden, the Democrats think the antidote to Trump, the thing that caused, is the thing that caused him? And that’s what people can’t get through their head. And Bernie Sanders is such a coward, politically, that he would not, he would not give the autopsy to the Joe Biden–Barak Obama Administration, which is what this country needs. People don’t know how we got to Donald Trump. We got it because Barack Obama have legislated exactly the same way John McCain and Mitt Romney or George Bush would have legislated, almost exactly. And that’s why we’re in the position we’re in today. And right now Barack Obama lives on a 49-acre estate on Martha’s Vineyard. And where the hell is he? What’s he doing? So do I think that our government is going to actually be able to pull us through this? No. Do I think that these effects of these protests are going to have lasting reformative effects? I don’t know. I really don’t think so. I think that the corporate state is just figuring out new ways to squash it. Just look how the cops co-opted the kneeling, and then they would kneel, and then get up and tear-gassed everybody to start clubbing the hell out of them. So this you got to be… our government is now an abusive… it’s like we’re in an abusive relationship with our own government. And there’s no help. Nancy Pelosi, the Squad—they’re a failure. The Squad is a complete 100% failure along with Bernie Sanders. Not only did they not stand up and try to help people through the CARES Act when this was being passed—they did nothing. What they did was they voted for it. They actually committed an evil. Now they gave covered to the rapacious oligarchy who’s screwing you, who is accidental now Bernie Sanders, and the Squad, and every Progressive in Congress signed off on the largest upward transfer of wealth in the history of the human race. You tell me what they’re worth. They’re worth less. So that’s why people are in the streets. They see what’s happening. So I really don’t think this government is able to reform itself. We’ll see. Bernie Sanders right now, this moment was created for him, Richard, this moment was… He has the solutions to our problems right now: Medicare for All, get rid of student debt, have to have a UBI, a Green New Deal—he has all the answers. Yet, he won’t push for them right now, because he is a subservient to the Democratic Party. He is bending the knee. He can’t do it fast enough. He’s sitting there trying to tell me that Joe Biden who is a demented walking death rattle, who is the cause of all of our problems right now is somehow the solution. It is an unbelievable dishonest act by not only Bernie but the entire Democratic Party, and the media. They won’t tell you he’s demented and it’s obvious to anybody that he is suffering from early onset dementia. And that is not your answer. And you think Trump’s not going to bring that up. So the problem is we have one-party rule. And that’s what people don’t realize. As Nancy Pelosi was ripping up Donald Trump’s speech at the State of the Union, she was passing his legislative agenda in full, including giving him an extra $131 billion dollars to go drop bombs on people—that they say he’s doing at the behest of Vladimir Putin—but also money for his border wall. Do you understand the capitulation of the Democratic Party? It’s actually not a capitulation, Richard. They’re actually on the same team. Donald Trump and Nancy Pelosi work for the same guy. This is professional wrestling—they have to come out and pretend to not like each other, they have to come out and pretend to put on a fight when they’re all working together be scenes. And you know that as well as I do.

WOLFF: Tell me, Jimmy, where you think this is going to go? We don’t have much time left, but given your analysis, and I understand what you say, and you’re right, we share a great deal. In less than in a minute, where do you think this is going? What’s the endgame here? What are we about to see in the rest of 2020 and in 2021?

DORE: You know, Richard, I’m not really smart enough to know what’s going to happen. This isn’t like the Sixties where it was for just civil rights. This is for I think a lot more. You know, I look at the protest and it’s not just black people. It’s all different kinds of black people, I mean, all different kinds of Americans: white, black, brown—all different kinds. So I’m not really smart enough to predict. I can hope. I can hope that, you know, we will… we will have some actual democracy happen in America—I’m not hopeful for that. Honest. It’s just the oligarchs have all the power. The income inequality is exploded. I don’t want to be a pessimist, but my cynicism cannot keep up with the Democratic Party.

WOLFF: Jimmy, you do know—right?—that your voice is very, very important and very widely listened to. You are an important player. You are a part of the of the critics that are willing to say the things that have to be said that the others are afraid of. So that’s why we wanted you on the show and that’s why I hope people listen to and deal with the kinds of positions you take. That kind of criticism, all too scarce, and on behalf of everybody who appreciates what you do, thank you for coming on the program and thank you very much for all that you do.


Transcript by Aleh Haiko
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